The 31st Annual Association of Insurance and Financial Analysts (AIFA) Conference is currently underway in the US.
Lloyd's director of finance and risk management, Luke Savage, and franchise performance director, Rolf Tolle, gave an address at the event, entitled 'Lloyd's: Building for the Future'. They outlined the advantages that Lloyd's Optimal Platform offers to capital providers.
Savage said the platform is designed to enable capital providers to maximise their returns by ensuring that the capital for each member or syndicate is based on each business' unique risk characteristics. He added that this is agreed in conjunction with Lloyd's in order to ensure that no capital provider is unfairly disadvantaged and Lloyd's central assets are protected.
Tolle added that through the performance management framework, Lloyd's can facilitate superior performance by assessing and improving underwriting processes and cycle management across the market, preparing class of business outlooks and long term strategy, and managing exposures through the use of realistic disaster scenarios (RDS).
He said that RDS are used by the syndicates to undertake their disaster planning and to identify their key aggregation and catastrophe risk exposures, with aggregate exposures used by the franchise performance division to monitor the market's potential total exposures.
Tolle also highlighted improvements in the system scheduled for 2006. "We will further improve catastrophe modelling and exposure management with a new $100bn RDS, a move to probabilistic modelling in the longer term, and increased focus on areas that were highlighted by the recent hurricanes".
